4. Performance Gloves, Inc. produces three sizes of sports gloves: small, medium, and large. A glove pattern is first stenciled onto leather in the Pattern Department. The stenciled patterns are then sent to the Cut and Sew Department, where the glove is cut and sewed together. Performance Gloves uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows: Department Pattern Department Cut and Sew Department Dollar Amount $216,000 960,000 Total Overhead 1,176,000 The direct labor estimated for each production department was as follows: Department Pattern Department Cut and Sew Department Direct Labor Hours 36,000 60,000 Total Direct Labor Hours 96,000 Direct labor hours are used to allocate the production department overhead to the products. The direct labor hour: per unit for each product for each production department were obtained from the engineering records as follows: Production Departments Small Glove Medium Glove Large Glove Pattern Department .30 .35 .40 Cut and Sew Department Total Direct Labor Hours per .60 .50 .84 .90 .85 1.24 Unit a. Determine the two production department factory overhead rates. b. Use the two production department factory overhead rates to determine the factory over-head per unit for each product.
4. Performance Gloves, Inc. produces three sizes of sports gloves: small, medium, and large. A glove pattern is first stenciled onto leather in the Pattern Department. The stenciled patterns are then sent to the Cut and Sew Department, where the glove is cut and sewed together. Performance Gloves uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows: Department Pattern Department Cut and Sew Department Dollar Amount $216,000 960,000 Total Overhead 1,176,000 The direct labor estimated for each production department was as follows: Department Pattern Department Cut and Sew Department Direct Labor Hours 36,000 60,000 Total Direct Labor Hours 96,000 Direct labor hours are used to allocate the production department overhead to the products. The direct labor hour: per unit for each product for each production department were obtained from the engineering records as follows: Production Departments Small Glove Medium Glove Large Glove Pattern Department .30 .35 .40 Cut and Sew Department Total Direct Labor Hours per .60 .50 .84 .90 .85 1.24 Unit a. Determine the two production department factory overhead rates. b. Use the two production department factory overhead rates to determine the factory over-head per unit for each product.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:4. Performance Gloves, Inc. produces three sizes of sports
gloves: small, medium, and large. A glove pattern is first
stenciled onto leather in the Pattern Department. The
stenciled patterns are then sent to the Cut and Sew
Department, where the glove is cut and sewed together.
Performance Gloves uses the multiple production
department factory overhead rate method of allocating
factory overhead costs. Its factory overhead costs were
budgeted as follows:
Dollar Amount
Department
Pattern Department
Cut and Sew Department
$216,000
960,000
Total Overhead
1,176,000
The direct labor estimated for each production department
was as follows:
Department
Pattern Department
Direct Labor Hours
36,000
60,000
Cut and Sew Department
Total Direct Labor Hours
96,000
Direct labor hours are used to allocate the production
department overhead to the products. The direct labor hours
per unit for each product for each production department
were obtained from the engineering records as follows:
Production Departments
Pattern Department
Cut and Sew Department
Small Glove Medium Glove Large Glove
.30
.35
.40
.60
.50
.84
Total Direct Labor Hours per
.90
.85
1.24
Unit
a. Determine the two production department factory
overhead rates.
b. Use the two production department factory overhead
rates to determine the factory over-head per unit for
each product.
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